Ben Lerer's new media empire that Discovery poured $100 million into is beefing up its exec team

New media mogul Ben Lerer is beefing up the finance and business
side of Group Nine Media — the holding company he
created in October that tied together NowThis,
Thrillist, The Dodo, and Seeker — with a $100 million investment
from Discovery.

The idea behind Group Nine was simple: consolidation worked in
TV, and it would work again in digital video.

“Brands and agencies want fewer points of contact,” Lerer told
Business Insider. “The idea that you can talk to one company and
just do more is something that really works. It worked in the TV
business.”

This thesis got some more ammunition from The
Information last week, which reported that brands are
looking for larger digital media deals, in a way that favors
bigger publications over smaller ones.

Judd MerkelGroup
Nine

“We’ve been hearing that for a long time,” Lerer said. “Fewer,
bigger partners.”

In moving toward the goal of having Group Nine be one of those
few big partners, on Monday the company announced two key hires:
new CFO Judd Merkel, formerly the CFO of Droga5, and new Head of
Global Business Development Miguel Burger-Calderon, formerly the
president of Elite Daily.

Lerer pointed to Merkel particularly as instrumental in helping
Group Nine develop into a disciplined and sustainable business.

Miguel
Burger-CalderonGroup
Nine

“While we aren’t in the exact same business [as agency Droga5],
there are a lot of similarities and common ground from his
experience,” Lerer said. “There is a certain [financial]
discipline in running agencies. Agencies grow profitably. That’s
a common trait between almost every great agency … A lot of
discipline around margin management.”

Lerer said he wants to make sure that what Group Nine is building
will endure, and isn't just a flash in the pan.

Four cultures

So far Lerer said the plan for integrating the four brands hasn’t
changed fundamentally since October.

“What we thought this was going to look like is what it’s going
to look like,” he said. And he said that the integration of the
tech platforms of the different Group Nine companies would
be completed soon. “The data [will be] living in one place really
shortly.”

That doesn’t mean that creating Group Nine has been easy,
however.

“There have been tons of growing pains,” Lerer said. “It is
really hard to take four cultures and then have those four
cultures live together, and create a fifth culture, Group Nine,
and do it when you are sprinting to put the business together, to
centralize as quickly as we can.”

Thrillist pains

One painful moment was layoffs last month at Lerer-founded
Thrillist, which cut over 20 staffers. Lerer characterized the
layoffs as part of a change in direction of Thrillist itself, and
not as part of the combination with other Group Nine brands.
Group Nine as a whole expects to add 100 people to its headcount
in 2017.

“When we went and built video the first time, we did some stuff
wrong,” he said of Thrillist. “We made some mistakes I’m
responsible for, other people in management [too]. We had to fix
those things to grow at the speed we should … In the race for
digital scale, brands can lose themselves. They’re a tech site
that starts writing about politics because that’s where eyeballs
are. I don’t think we were horribly guilty of that, but we
extended coverage into a few areas that weren't core to the
mission of Thrillist.”

Thrillist employees have also recently
criticized management for being slow to respond to
unionization efforts (after over 85% of editorial employees
signed union cards). Lerer declined to comment on the record
about the situation, but pointed Business Insider to this
statement from Thrillist president Adam Rich:

“The union has asked to be recognized without a vote; however, we
want to ensure that all employees have the opportunity to
participate in making this choice. Ultimately this is the
decision of our employees: we celebrate their right to exercise
their personal power of choice, and will support their decision.”

The other side

With the integration of the Group Nine brands nearly complete on
the technical side, Lerer is looked toward developing new forms
of content across the brands.

One particular area of focus is in creating premium video that
can make the jump between digital and traditional TV. That’s a
big reason Discovery invested the $100 million in October.

“There’s a lot of work going on in super premium original
[video],” Lerer said. “You’re going to see lots more of that
across all Group Nine brands.” The discussions with traditional
TV companies Lerer
was talking about in October will soon start bearing fruit,
he said.

In all, Lerer described the Group Nine integration since October
as like swimming across a fast-moving and rocky river. In October
they had all just jumped in, and now, Lerer said he can feel that
the other side is coming.

Business Insider parent company Axel Springer is an investor
in Group Nine Media.